For years, Hong Kong has been known for its astronomical real estate prices. In 2020, it was designated the most expensive real estate market in the world for the tenth consecutive year.
But 2021 could be a year of major changes for the city’s real estate market. Hong Kong residents have been gathering in the UK since China passed a controversial new national security law last summer. In January, a new visa scheme in the United Kingdom made it even easier for Hong Kong to travel there. The British government has said it expects more than 300,000 Hong Kongers to move to the UK over the next five years under the new system.
As a result, high infamous rents in Hong Kong could fall by 10% and holiday rates could reach a maximum of 18 years, bringing a major shake-up to the Hong Kong real estate market, according to the South China Morning Post, which quoted a new Bloomberg Intelligence report.
An exodus from one of the most expensive cities in the world
The high cost of living in Hong Kong and inequality in housing are well documented. While the rich throw hundreds of millions on mansions and build “Versailles-like” villas, many residents can only afford to live in tiny “coffin houses.”
Even the COVID-19 pandemic and months of social unrest did not have much of an impact on Hong Kong prices in 2020. Rents remained high last year and house prices fell by only 4% between May 2019 and October 2020, according to Reuters . .
Hong Kong has long been the world’s most expensive housing city, but things could change in 2021.
Lee Mumford / Agora
But 2021 could be another story. After China passed a national security law threatening life imprisonment for pro-democracy protesters last year, Britain has registered a record number of Hong Kongers applying for British (overseas) national passports, known as BN ( O), which allow them to live in the UK, but do not automatically grant them the right to work.
The British government said it issued about 200,000 such passports to Hong Kong in the first 10 months of the year at a rate of about five passports per minute.
In January, the UK made it even easier for Hong Kong residents by launching a new visa scheme for BN (O) holders to live and work in the UK and apply for citizenship after six years, according to a government statement. They can apply for visas online from their homes in Hong Kong.
In total, about three million people in Hong Kong are eligible to apply for BN (Os) and move to the UK, according to a British government study.
China has denounced the recent move by the British government and said it will no longer recognize the BN (O) as valid travel documents.
Rich Hong Kong builds luxury real estate in London.
Dan Kitwood / Getty Images
An emigration boom
The influx of Hong Kongers into the UK over the past year has led to an increase in demand for luxury real estate in London, local agents told Insider’s Bill Bostock last summer.
In 2020, London homes that sold for £ 10 million (about $ 14 million) or more were “dominated” by buyers in Hong Kong and China, luxury real estate agency Beauchamp Estates said in a statement. January report provided Insider.
Meanwhile, Hong Kong could have 66,683 empty homes in 2021, up from 52,370 last year, according to the Bloomberg report.
“This is the biggest emigration boom in Hong Kong’s history,” Andrew Lo, a Hong Kong emigration consultant, told Nikkei Asia last month. “People at different levels of society, aged between 18 and 80, all talk about emigration.”